Rating Change #4
International Game Technology (IGT) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its notable return on equity, reasonable valuation levels and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income.
Highlights from the ratings report include:
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Hotels, Restaurants & Leisure industry and the overall market, INTL GAME TECHNOLOGY's return on equity exceeds that of both the industry average and the S&P 500.
- INTL GAME TECHNOLOGY's earnings per share declined by 32.0% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, INTL GAME TECHNOLOGY increased its bottom line by earning $0.97 versus $0.74 in the prior year. This year, the market expects an improvement in earnings ($0.99 versus $0.97).
- The gross profit margin for INTL GAME TECHNOLOGY is rather high; currently it is at 65.30%. Regardless of IGT's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 11.10% trails the industry average.
- IGT, with its decline in revenue, underperformed when compared the industry average of 10.2%. Since the same quarter one year prior, revenues slightly dropped by 1.3%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
International Game Technology engages in the design, development, manufacture, and marketing of electronic gaming equipment and systems worldwide. The company has a P/E ratio of 18.8, below the average computer software & services industry P/E ratio of 19.3 and above the S&P 500 P/E ratio of 17.7. International Game Technology has a market cap of $4.88 billion and is part of the technology sector and computer software & services industry. Shares are down 5.9% year to date as of the close of trading on Tuesday.You can view the full International Game Technology Ratings Report or get investment ideas from our investment research center.